China Turns to Silicon Valley to Bolster Homegrown AI Firms

Chinese tech giants are reportedly using Silicon Valley to recruit for their AI projects.

Companies such as ByteDance and Alibaba have recently begun expanding their offices in California as they seek to poach workers from American competitors for their generative artificial intelligence (AI) efforts, the Financial Times reported Tuesday (Nov. 19).

This push is happening in spite of attempts by the U.S. to hinder Chinese companies. The U.S. has banned exports of Nvidia AI chips, key to developing AI models. And the Department of Commerce has proposed a rule that would require cloud providers to verify the identity of users training AI models and report on their activities.

The U.S. also recently ordered Taiwan Semiconductor Manufacturing Co. (TSMC) to cease shipments of certain advanced microchips to its Chinese customers, a move designed to block off China’s access to high-performance technology critical for AI development.

Sources told the FT that Alibaba has approached engineers, product managers and AI researchers who have worked at OpenAI and some of America’s largest tech companies. One source said that the company is putting together a team focused on Alibaba International Digital Commerce Group’s AI-powered search engine Accio for merchants.

And a former OpenAI researcher told the news outlet they had been inundated with messages from Chinese tech firms — including Alibaba and food delivery platform Meituan — seeking information about their background and offering employment opportunities.

Meituan has begun trying to bolster its team in California after executives became worried it was falling behind in the AI race, two sources told the FT.

ByteDance, owner of video platform TikTok, has the strongest foothold in Silicon Valley, the report said, with several teams working on different products.

Meanwhile, PYMNTS earlier this year examined the pressures facing Silicon Valley as Chinese companies cut prices on their AI models. Experts say this shift could democratize AI capabilities, letting smaller startups compete with tech titans and traditional businesses to overhaul their operations with the latest technology.

“We will see significantly more competitiveness since much VC investment is going toward ‘picks-and-shovels’ AI technologies, and we should see more global pricing wars, which will be good,” Nick Rioux, co-founder and CTO of the AI company Labviva, told PYMNTS. “When market forces impact technology innovation, we can create more use cases for a broader, more diverse set of applications. This is good and relatively unexpected when looking at how China has managed technological governance in the past.”

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.